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Bolu Abiodun
Published:
A Nigerian court has adjourned the tax evasion trial against cryptocurrency exchange Binance and its executives until April 30, 2025. The postponement allows the Federal Inland Revenue Service (FIRS) to respond to Binance’s request to annul a previous court order permitting the service of court documents via email.
Binance, registered in the Cayman Islands without a physical presence in Nigeria, contends that the FIRS improperly served court documents without obtaining court approval.
The exchange faces allegations of causing $79.5 billion in economic losses and is being pursued for $2 billion in back taxes. The Nigerian government asserts that Binance’s significant economic activities within the country obligate it to corporate tax liabilities for 2022 and 2023, including a 10% annual penalty on unpaid taxes.
This legal action is part of Nigeria’s broader efforts to regulate cryptocurrency platforms, which authorities claim have contributed to the naira’s instability. In February 2024, two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, were detained by Nigerian authorities amid a crackdown on the cryptocurrency industry. Anjarwalla reportedly escaped custody in March 2024, adding complexity to the situation.
The Nigerian government has intensified its scrutiny of cryptocurrency operations, attributing significant economic challenges to platforms like Binance. In February 2024, the Central Bank of Nigeria (CBN) alleged that approximately $26 billion in transactions flowed through Binance, carried out by unidentified individuals. This prompted demands for information about Binance’s top 100 users and their transaction histories over six months.
In response to mounting regulatory pressure, Binance suspended its peer-to-peer (P2P) trading feature in Nigeria on February 20, 2024, citing significant currency movements and potential system abuse. Subsequently, access to Binance’s website was restricted within the country, reflecting the government’s stringent stance on cryptocurrency activities.
The upcoming court session on April 30 is expected to address the procedural issues raised by Binance and determine the next steps in the tax evasion case.
This case underscores the ongoing tension between innovative financial technologies and regulatory frameworks in emerging markets like Nigeria. As the situation unfolds, it highlights the challenges of balancing technological advancement with economic stability and regulatory compliance.
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